The Federal Court has again imposed pecuniary penalties
on trustees of an SMSF for breaches of the Superannuation
Industry (Supervision) Act 1993 (SIS Act).
Mr and Mrs Ryan withdrew a total of $209,677 from their SMSF
between June 2009 and June 2012 in 68 transactions. The withdrawals
were treated as loans, but were undocumented, unsecured, no
interest was paid and no repayment date agreed. Mr and Mrs Ryan
Mr and Mrs Ryan agreed they had comitted contraventions of
sections 62 (sole purpose test), 65 (loans to members), 84
(in-house assets) and 109 (not dealing on arm's length terms)
of the SIS Act.
The ATO disqualified Mr and Mrs Ryan from being the trustees of
a superannuation entity, and they rolled their remaining
superannuation benefits into a public superannuation fund.
On 18 September 2015, Edelman J imposed pecuniary penalties of
$20,000 on each of Mr and Mrs Ryan, to be paid in monthly
instalments over three years. In setting the amount, Edelman J took
into account the substantial amount involved (nearly all the
benefits in the SMSF), the fact the contraventions were deliberate,
the Ryan's prior contraventions and financial situation and the
high level of cooperation the Ryans provided to the ATO.
Mr and Mrs Ryan were also ordered to pay the ATO's
This case again highlights the options available to penalise
trustees who breach the SIS Act.
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